Section 3

Eligibility conditions and criteria for granting the AEO certificate

3.5 Safety and security

3.5.1 The applicant must have in place appropriate internal controls and measures to ensure safety and security of applicant’s business and his supply chain, in addition to any specific legal requirements that may be applicable to the business.In order to satisfy the requirements of AEO status, the applicant will need to ensure security of procedures, cargo, procedures, conveyances, premises, personnel and business partners. The applicant's security and safety standards shall be considered to be appropriate if the following conditions are fulfilled:

3.5.2 Procedural Security

In order to ensure security of the international supply chain, the applicant must have in place appropriate internal controls and measures to ensure safety and security of procedures relating to applicant’s business and his supply chain. With this view, following criteria should be fulfilled by the applicant:

i. The applicant should develop and maintain a security policy and procedure manual which shall contain detailed guidelines on procedures to be followed to preserve the integrity of the cargo while in its custody, loading and unloading from transport conveyance and during transport. The manual should also stipulate how seals are to be controlled and affixed to cargo and transport conveyances.

ii. Security measures should be in place to ensure the integrity and security of processes relevant to the transportation, handling, and storage of cargo in the supply chain.

iii. Proper documentation of management procedure should be in place to ensure that all documentation used in the clearing of cargo is legible, complete, accurate and protected against the exchange, loss of introduction of erroneous information.

iv. Procedure should be in place to ensure that information received from business partners is reported accurately and timely as well as declared in the time limit regulated by Customs.

v. Procedure should be in place to ensure that:

a. Import / Export cargo are reconciled against the information on the bill of lading.

b. The weights, labels, marks and piece count of the import/export cargo are accurately indicated.

c. Import/export cargo are verified against purchase/delivery orders.

d. Drivers delivering or receiving cargo are positively identified before cargo is received or released.

e. All shortages, overages, and other significant discrepancies or anomalies must be resolved and/or investigated appropriately.

3.5.3 Premises Security:

In order to ensure security of the international supply chain, the applicant must ensure that the buildings to be used in connection with the operations to be covered by the certificate are constructed of materials which resist unlawful entry and provide protection against unlawful intrusion. In addition, the applicant must ensure that appropriate access control measures are in place to prevent unauthorized access to shipping areas, loading places and cargo areas. With this view, following criteria should be fulfilled by the applicant:

i. Buildings must be secure against unlawful entry.

ii. All gates, fences and windows must be secured with locking devices or alternative access monitoring or control measures.

iii. Authorized personnel must control the issuance of locks and keys.

iv. Adequate internal and external lighting must be provided especially for entrances and exits, cargo handling and storage areas, fence lines and parking areas.

v. Gates through which vehicles and/or personnel enter/exit must be manned, monitored or otherwise controlled. Vehicles accessing restricted areas must be parked in approved area and their license plate numbers furnished to Customs upon request.

vi. Only properly identified and authorized persons, vehicles and goods may be permitted access.

vii. Access to document or cargo storage areas may be restricted.

viii. There should be appropriate security systems for access control.

ix. Restricted areas should be clearly identified.

x. Integrity of structures and systems must be periodically inspected.

xi. Perimeter fencing should enclose the areas around cargo handling and storage facilities.

xii. Clear demarcation within a cargo handling structure should be created to segregate domestic, international, high value and hazardous cargo.

xiii. The number of gates should be kept to the minimum necessary for proper access and safety.

xiv. Unauthorized vehicles should be prohibited from parking in or adjacent to cargo handling and storage areas.

3.5.4 Cargo Security:

In order to ensure security of the international supply chain, the applicant must have in place appropriate measures for the handling of goods include protection against the introduction, exchange or loss of any material and tampering with cargo units. With this view, following criteria should be fulfilled by the applicant:

i. Only properly identified and authorized persons should have access to the cargo.

ii. Integrity of cargo should be ensured by permanent monitoring or keeping in a safe, locked area.

iii. All seals must meet the current PAS / ISO 17712 standards for high security seals. In cases it is not possible to procure and use PAS / ISO 17712 seals for air consignments/courier consignments any international seal compatible with standards of PAS/ISO 17712 shall be used. However in case of maritime containerized cargo only PAS / ISO 17712 seals shall be used.

iv. The integrity of container seals should be checked by the authorized person by following the procedure prescribed in the security policy manual.

v. Only authorized personnel should distribute container seals and safeguard their appropriate and legitimate use.

vi. When appropriate to the type of cargo container used, a seven-point inspection process is recommended: Front wall, Left side, Right side, Floor, Ceiling/Roof, Inside/outside doors, Outside/undercarriage.

vii. Appropriate procedures should be laid down on measures to be taken when an unauthorized access or tampering is discovered.

viii. Goods should be uniformly marked or stored in designated areas and procedures should exist to weigh / tally them and compare them against transport documents, purchase/sales orders and Customs papers.

ix. Internal control procedures should exist when discrepancies and/or irregularities are discovered.

3.5.5 Conveyance Security:

In order to ensure security of the international supply chain, the applicant must ensure that the conveyances to be used in connection with the operations to be covered by the certificate are handled in a manner which ensures security of the cargo. With this view, the applicant must:

i. ensure to the extent possible that all conveyances used for the transportation of cargo within the supply chain are capable of being effectively secured.

ii. ensure to the extent possible that all operators of conveyances used for transport of cargo are trained to maintain the security of the conveyance and the cargo at all times while in its custody.

iii. require operators, to report actual or suspicious incident to designated security department staff of the applicant company as well as to maintain records of these reports, which should be available to the AEO Programme Team and the Customs.

iv. ensure that potential places of concealment of illegal goods on conveyances are regularly inspected,

v. ensure that transporters make sure that conveyance integrity is maintained while the conveyance is en route transporting cargo to export/import points or import/transit containers by utilizing a tracking and monitoring activity log or records.

vi. ensure that pre-determined routes are identified by the dispatcher, and procedures must consist of random route checks along with documenting and verifying the length of time between the loading point/trailer pickup and the delivery destinations.

vii. ensure that drivers must notify the dispatcher of any route delays due to weather, traffic and/or rerouting. viii. ensure that the management of transporters must perform a documented, periodic, and random verification process to ensure the logs are maintained and conveyance tracking and monitoring procedures are being followed and enforced.

3.5.6 Personnel Security:

In order to secure the international supply chain, the applicant must conduct, as far as possible, security screening of prospective employees to be employed in security sensitive positions, and carry out periodic background checks. With this view, following criteria should be fulfilled by the applicant:

i. All reasonable precautions must be taken when recruiting new staff to verify that they are not previously convicted of security-related, Customs or other criminal offences.

ii. Periodic background checks must be conducted on employees working in security sensitive positions.

iii. Employee identification procedures should require all employees to carry proper identification that uniquely identifies the employee and organization.

iv. Procedures to identify, record and deal with unauthorized or unidentified persons, such as photo identification and sign-in registers for visitors etc. must be ensured at all points of entry.

v. Procedures must be in place to expeditiously remove identification and access to premises and information for employees whose employment is terminated.

3.5.7 Business Partner Security

In order to secure the international supply chain, the applicant must have implemented measures to ensure a clear identification of his business partners. With this view, following criteria should be fulfilled by the applicant:

i. The applicant must have written and verifiable process, including the capability of financial soundness and compliance with the safety requirement set by the contracts as well as the capability of detection and correction of safety defects, for the selection of business partners.

ii. For those business partners having AEO certification, the applicant must get those business partners’ copies of certification.

iii. For non-AEO partners, the applicant must get written confirmation of meeting AEO equivalent security criteria. Such business partners must have one of the following written documents demonstrating their compliance with security criteria:

a. Contractual document

b. A completed self-assessment security questionnaire from the applicant.

c. A written statement from the business partner demonstrating their compliance with AEO security criteria.

d. Senior business partner officer attesting to compliance.

e. Documents from the business partners demonstrating their compliance with and equivalent and accredited security program administered by a foreign Customs authority.

iv. Periodic reviews of business partner’s processes and facilities must be conducted based on risk, and must maintain the security standards required by the applicant.

3.5.8 Security Training and Threat Awareness

In order to secure the international supply chain, the applicant must ensure that its concerned employees actively participate in security awareness programmes. With this view, following criteria should be fulfilled by the applicant:

(i) The applicant should ensure that:

a. A threat awareness program is established and maintained for employees to foster awareness of the threat at each point in the supply chain.

b. Employees are aware of the procedures the company has in place to address a situation and how to report it.

c. Specific training is offered to assist employees in maintaining cargo integrity, recognizing internal conspiracies and protecting access controls.

(ii) Supply chain security training of employees must include the following items:

a. Security policy of the company.

b. Potential risk to internal security of the company.

c. Maintaining cargo security.

d. Access control measures of the company.

e. Identifying and reporting suspicious cargo and personnel.

f. Conveyance management and cargo security for conveyance management personnel.

(iii) Records of security training must be maintained and made available for verification by the AEO Programme Team and the Customs.